A. Average Fixed Cost (AFC) always decline with increase in output.
B. Marginal Cost (MC) intersect AVC and Average Total Cost (ATC) at their minimum point.
C. Learning Curve implies cost rises with accumulated output.
D. In the long run, all costs are variable.
E. Longrun Average Cost (LAC) is envelop of Shortrun Average Cost (SAC) curves
Choose the correct answer from the options given below:
Analyzing Firm Cost Statements
This solution evaluates the truthfulness of five statements related to firm cost behavior in economics.
Statement Evaluation
- Statement A: Average Fixed Cost (AFC) always declines with increase in output.
This is True. Since Total Fixed Cost (TFC) remains constant, AFC (TFC / Output) naturally decreases as output increases.
- Statement B: Marginal Cost (MC) intersects AVC and Average Total Cost (ATC) at their minimum point.
This is True. A fundamental principle in cost theory states that MC intersects both AVC and ATC curves at their respective lowest points.
- Statement C: Learning Curve implies cost rises with accumulated output.
This is False. A learning curve demonstrates that costs typically decrease with increased cumulative output or experience due to improved efficiency.
- Statement D: In the long run, all costs are variable.
This is True. In the long run, firms can adjust all inputs, meaning there are no fixed costs; all costs become variable.
- Statement E: Long-run Average Cost (LAC) is an envelope of Short-run Average Cost (SAC) curves.
This is True. The LAC curve represents the minimum average cost achievable for each output level when all factors are adjustable, tracing the lower boundary (envelope) of various SAC curves.
Identifying Correct Statements
Based on the analysis, statements A, B, D, and E are true. Statement C is false.
Therefore, the correct option includes A, B, D, and E only.
Important Questions from Mixed Topic (CUET PG)
- Who was the founder of Bolshevik Communist party?
- What is the key guide to statecraft in the realist tradition?
- Chronologically arrange the events in the Cold War period.
A. Berlin Wall is constructed
B. Communist China joins the UN
C. Soviet invasion of Czechoslovakia
D. Berlin Blockade
Choose the correct answer from the options given below: Morgenthau's principles of political realism are:
A. Politics is rooted in permanent and unchanging human nature which is basically self centred, self-regarding and self-interested
B. Politics is an autonomous sphere of action and cannot therefore be reduced to morals
C. International Politics is an arena of conflicting self-interests
D. The ethics of international relations is situational ethics which is very different from private morality
Choose the correct answer from the options given below:Who among the following political thinkers consider the anarchical self help system to be a compelling factor for States to maximise their relative power positions?
